Best Practices to Improve Fintech Daily and Monthly Active Users
Metrics like revenue are often used to measure growth, but retention is an unmissable key indicator as well. After all, without active, recurring users, what’s the point of having an app? It’s well and good to have produced one; however, you need active “stickiness”—shorthand for an app’s ratio between daily active users (DAU) and monthly active users (MAU)—to make it a productive endeavor.
Luckily our Fintech App Engagement Benchmark Report found an average stickiness quotient of 22% for fintech apps—which outperforms other app categories and signifies fintech’s staying power.
But how do you calculate this stickiness? Measure user engagement by calculating the average number of active users per day and month, then divide the DAU by the MAU. Multiply the total by 100 to get your percentage.
Consistently high scores indicate the efficacy of the app’s ability to keep users, giving it a profound impact on a company’s projected and actual growth. On the other hand, low stickiness can be indicative of a misalignment between a fintech app and its users, which could spell future losses. Luckily, a company can increase stickiness by implementing proven strategies.
Best Practices To Improve DAU and MAU
Any fintech expert will tell you that a company’s stickiness score signifies its ability to add value to each visit. Every app has unique draws—and improving engagement starts with examining what active users are seeking. Adjusting features to make your app more intuitive or adding interactive options can go a long way toward driving more repeat traffic.
Let’s look at some basic best practices to boost your fintech app’s DAU and MAU today—you don’t have to be an expert to employ these strategies!
- Optimize user onboarding by simplifying the account setup process. Don’t underestimate the power of convenience. Too many barriers between users and access to the features they’re looking for will cause less motivated individuals to drop off.
Read more: Seamless Sign-Up and Onboarding: 8 Best Practices for Successful Fintech Companies
- Understand user behavior through analytics. Every fintech expert knows the value of data. Your users are showing you what is engaging to them, and what they want more of.
Read more: 5 Analytics Reports You Need Right Now
- Personalize to meet the needs of each user. Customize messaging, offerings, and services to speak to the individual desires of the customer. Once you’ve gathered data on users, optimize your app for their unique interests.
Read more: Why Hyper-Personalization Is the New Normal
- Drive engagement through gamification. Rewarding users for performing specific actions creates a sense of accomplishment and leads to a positive emotional connection to the brand. As a result, you’ll draw users to your competitions, levels, or rewards.
- Re-engage lost users by sending push notifications, emails, or reaching out through social media. With the right messaging, many former users might log back in.
Fintech Expert Tip: Finding the Right KPI to Track Engagement
Of course, depending on the nature of your app, a positive active user rate naturally might sit low; conversely, some apps generate high DAU or MAU scores on their own. For instance, an investment app may by nature have higher engagement, as it’s usually used more frequently than a banking app. Frequency of usage varies among platforms—some require repeat usage, while others are okay being rarely opened.
If DAU—or even MAU—does not fit your business model, that doesn’t mean you can’t still include KPIs that track user engagement. For low-frequency business models, a company can measure retention based on the number of active users over a year. Evaluate the effectiveness of your value delivery to users by measuring active users in a way that aligns with your goals.
DAU/MAU and User Engagement: How It All Works Together
Engagement and stickiness go hand-in-hand. Simply put, engagement is a measurement of how often a customer interacts with your app over time. It’s more flexible than stickiness in how it’s measured, making it a better metric for companies with less interest in a strict calculation of DAU/MAU. For these companies, engagement is one of the best metrics to use to measure users’ loyalty to your service.
Different companies measure engagement differently. The key to customizing engagement into a suitable metric for your company is first defining what an active user is to you. Does simply logging in count as activity? Or do your users need to perform some sort of effort like posting content, making a transaction, or interacting with features? Pinpoint what counts as an active user for your company and track engagement within those parameters.
Common Mistakes Made Measuring Engagement
Even low-frequency apps can utilize DAU and MAU metrics to track their definition of active users. It’s the best way to assess how many users remain active for days, weeks, and months after installing your app. However, there are some simple mistakes to look out for when tracking active user engagement:
- Avoid projecting growth based on an initial bump in users after a launch or marketing campaign. Track the success of your effort by measuring the number of users who remain active months down the line, since many new users will drop off.
- Don’t mirror other businesses’ metrics. Every company is unique, and the KPIs for one business might not work for another. Measure stickiness or engagement based on your own business model.
- Don’t get tied up in tracking total active users. Not every user is of equal value to you, as one-time users don’t offer consistent revenue. Measure growth through retention.
- Low-frequency, high-value platforms like Airbnb have less use for DAU and even MAU—but that doesn’t mean they can’t track engagement. The timeline of active use is just longer for these types of apps.
Your Fintech App vs. The Industry?
Driving active user growth starts with understanding how your app fits in the fintech marketplace. If you’re interested in learning how other fintech apps perform on key stats like DAU and MAU, check out our Fintech App Engagement Benchmark Report.
